Hyderabad: Finance Minister Nirmala Sitharaman last week gave the five tranches of stimulus package of Rs 20 lakh crore as announced by the Prime Minister Narendra Modi for the country to be 'self-reliant' and deal with COVID-19.
Different States reacted on this package, Telangana Chief Minister K Chandrasekhar Rao lambasted the Narendra Modi-led NDA government over the fiscal stimulus package, accusing it of treating states like "beggars" and imposing "laughable" conditions for increasing borrowing limits under the FRBM Act.
The Centre has reduced its own prestige, he said, referring to the conditions linked to the increased borrowing limits for states under the Fiscal Responsibility and Budget Management (FRBM) Act.
Citing international journals as having commented whether the Union Finance Ministers aim was to revive the GDP or to reach the Rs 20 lakh crore number (the stimulus package announced by Prime Minister Narendra Modi), he said This is a very cruel package".
West Bengal Chief Minister Mamata Banerjee criticised the Centre's decision to link increased borrowing limits for states under the Fiscal Responsibility and Budget Management (FRBM) Act to the fulfilment of conditions, saying it is against the basic tenets of the federal structure and an "eyewash to befool people".
Banerjee, who is also the Trinamool Congress supremo, terming the entire economic package a "big zero".
Union Finance Minister Nirmala Sitharaman had said on Sunday that the Centre is increasing the borrowing limit under the FRBM Act from three per cent to five per cent.
"But it's only 0.5 per cent. The other 1.5 per cent I will get if I agree to certain conditions which go against the federal system. So it's a big zero... It is an eyewash to befool people," she said.
Terming the conditions put forth in the fifth and final tranche of the economic stimulus package of the Centre an "assault on the federal structure", Banerjee, who is among the most strident critics of the BJP, said for the 1.5 per cent states have to do away with the federal structure.
He also said it is unreasonable to attach conditionalities for borrowings beyond three per cent of the state gross domestic product (GSDP).
In a letter to Prime Minister Narendra Modi, the text of which was released to the media here, Palaniswami said: "Aggressively pushing a reform agenda on which a consensus is yet to be developed at a time when states have approached the Centre for additional borrowing out of sheer desperation, is not in keeping with the spirit of cooperative federalism."
Read more:Govt's fiscal stimulus package hopelessly inadequate: Chidambaram
Kerala Chief Minister Pinarayi Vijayan expressed his displeasure at the way certain conditions have been set when Union Finance Minister Nirmala Sitharaman raised the borrowing limits of states from 3 per cent to 5 per cent of GDP for financial year 2020-21.
"The Centre is borrowing 5.5 per cent of the GDP but when it came to states, conditions are being placed. This is against the federal structure and is not fair," said Vijayan.
He said currently states can borrow only three per cent and were the first to demand hike in the borrowing limit to 5 per cent.
"To increase the borrowing limit from 3 to 3.5 per cent, is allowed for all, with no conditions. But from 3.5 to 4.5 per cent there have been four conditions. This is not acceptable , anyway we are awaiting for more details on it," said Vijayan and added that if conditions are being set then Kerala will only be able to borrow Rs 4,500 crore.
(With Inputs from PTI and IANS)
